But the move has been fiercely criticised by human rights campaigners, who argue that the Union is abandoning its attempts to put pressure on Russia to bring war criminals to justice.

EU foreign ministers are expected to agree to unfreeze all of the aid originally allocated to Russia in the 2000 TACIS assistance budget at their meeting in Luxembourg next Monday (10 July). “The member states will release all the money, even though there are some hardliners,” said one diplomat.

The UK, Germany and Italy have argued strongly in favour of unblocking the aid as a sign of the Union’s willingness to cooperate with Russia. France was originally opposed to easing the EU’s stance on Chechnya, but it is expected to go along with the will of the majority now that it has taken over the Union presidency.

EU diplomats say the release of the money will depend on Russia meeting certain conditions, such as making efforts to ensure the rule of law and democratic processes and introducing special safeguards to ensure that the funds are spent properly.

They add that the Union will continue to insist that Russia addresses the international community’s concerns about its campaign in Chechnya by pursuing a political solution to the conflict, conducting an independent investigation into human rights abuses, and cooperating with international humanitarian organisations.

EU leaders decided to block the money at their December summit in Helsinki in protest at Moscow’s military campaign against separatist rebels in Chechnya in which innocent civilians were targeted and driven from their homes.

But following the election of former KGB chief Vladimir Putin as Russian president in May, Union governments have been striving to build a “strong and healthy partnership” with Russia to try to encourage Moscow to introduce reforms to improve its economic performance and make the country more attractive to foreign investors.

But the shift in the EU’s stance has been attacked by campaign groups which say that, by releasing the money, the Union will lose leverage over Moscow to comply with the West’s demands. “It is like forgive and forget. We feel that the EU is giving up all its pressure without getting anything in return,” said Lotte Leicht of Human Rights Watch.

As part of the new approach towards Russia, the Union is also due to decide by the end of the year whether to grant Moscow preferential trade concessions worth 200-300 million euro in return for complying with international labour standards.

A consultant has been commissioned to assess whether Russia meets the requirements. The EU will also decide later this year whether to proceed with a cooperation agreement on science and technology.